(1) Where any duty of excise has not been levied or paid or has
been short-levied or short-paid or erroneously refunded by reason of fraud,
collusion or any willful mis-statement or suppression
of facts, or contravention of any of the provisions of this Act or the rules
made thereunder with intent to evade payment of duty,
the person liable to pay duty as determined under sub-section (2) of section
11A shall, in addition to the duty, be liable to pay interest at such rate not
below ten per cent and not exceeding thirty per cent per annum, as is for the
time being fixed by the Board, from the first day of the month succeeding the
month in which the duty ought to have been paid under this Act or the rules
made thereunder or from the date of such erroneous
refund, as the case may be, but for the provisions contained in sub-section (2)
of section 11A, till the date of payment of such duty.

(2) For the removal of doubts, it is hereby declared that the
provisions of sub-section (1) shall not apply to cases where the duty became
payable before the date on which the Finance (No. 2) Bill, 1996 receives the
assent of the President.

Explanation 1 : Where the duty
determined to be payable is reduced by the Commissioner (Appeals), the
Appellate Tribunal or, as the case may be, the court, the interest shall be
payable on such reduced amount of duty.

Explanation 2 : Where the duty
determined to be payable is increased or further increased by the Commissioner
(Appeals), the Appellate Tribunal or, as the case may be, the court, the
interest shall be payable on such increased or further increased amount of
duty.